Research Update: Holcim Ltd. Upgraded To 'BBB+' On Anticipated Resilient Cash Flow Generation And Margins; Outlook Stable

Switzerland-headquartered building materials manufacturer Holcim Ltd. has now delivered three years of resilient operating performance and credit metrics commensurate with a higher rating--notably FFO to debt comfortably above 30%. We anticipate that the company will continue performing well in 2022-2023, notwithstanding the pressure from accelerating energy cost inflation. We forecast that Holcim will post S&P Global Ratings-adjusted funds from operations (FFO) to debt of 41%-43% in 2022 and about 47% in 2023, consistently above the 30% threshold we consider as commensurate with a 'BBB+' rating. This compares with the 44.3% in 2021 and 40% in 2020. We therefore raised our long-term issuer credit rating on Holcim to 'BBB+' from 'BBB'. We affirmed the short-term issuer rating at 'A-2'. We also

... Holcim Ltd. has now delivered three years of resilient operating performance and credit metrics commensurate with a higher rating--notably FFO to debt comfortably above 30%. - We anticipate that the company will continue performing well in 2022-2023, notwithstanding the pressure from accelerating energy cost inflation. - We forecast that Holcim will post S&P Global Ratings-adjusted funds from operations (FFO) to debt of 41%-43% in 2022 and about 47% in 2023, consistently above the 30% threshold we consider as commensurate with a '###+' rating. This compares with the 44.3% in 2021 and 40% in 2020. - We therefore raised our long-term issuer credit rating on Holcim to '###+' from '###'. We affirmed the short-term issuer rating at 'A-2'. We also raised the issue ratings on Holcim's senior unsecured debt to '###+' from '###'. - The stable outlook reflects our view that Holcim's adjusted FFO to debt ratio will remain comfortably above...

Research Update